welcome

Personal Debt Solutions - IVA's

An IVA (Individual Voluntary Arrangement) is a legally binding arrangement with your creditors which allows you to repay your debts in affordable monthly payments over a fixed period of time, usually five years.

Your IVA application is put forward to your creditors in a document called a proposal. The proposal explains to your creditors why you need an IVA.

The proposals are lodged into court and your creditors also receive a copy. If your assets are at risk because of action taken by creditors, we can apply to court for an Interim Order. This means that creditors cannot commence or continue with any action against you and your assets unless the court permits them to do so.

A meeting is then held with your creditors where they are able to vote on whether to accept, alter or reject your proposals - 75% of creditors must agree to the proposal in order for the IVA to go-ahead. As long as your proposal demonstrates a genuine desire to repay as much of your debt as you can afford, it is likely that creditors will accept your IVA. It is our role to guide you on what creditors will find acceptable.

Once your IVA is approved all interest and charges on your unsecured debt is frozen. If creditors accept that you can only repay a proportion of your debt, the balance of your debt will be written off as long as you keep to the terms of your agreement.

An IVA can bring tremendous relief from debt but it does require discipline. You will no longer be able to resort to credit and your expenditure will be assessed using either the Money Advice Trust trigger figures or the CCCS guidelines and you will need to justify expenditure which exceeds these guidelines. The disadvantages are detailed in our FAQ section

How do the IVA fees get paid?

As soon as you decide to proceed with an IVA then your payments to creditors end and contributions towards your IVA start. The amount you pay will be set at a figure which you have agreed you can afford.

The Insolvency Practitioner will charge fees for its role as the nominee and as the supervisor and a separate fee is payable for the Insolvency Practitioner's work in each of these roles. Charges will also be made for additional expenses.

The nominee fee is a fixed fee depending on the complexity of the IVA but typically is between £1,000 and £2,000. This is for the pre-appointment work in setting up your proposal to your creditors.

The supervisory fees are normally capped by creditors at between 15 and 20% of realisations and are drawn monthly from the monthly contributions. This is for post-appointment work in maintaining your IVA until the IVA is concluded.

It takes around 6 - 8 weeks to set up an IVA and during this period you will commence your monthly contributions into your IVA. It is likely that by the time the IVA is approved, you will have made one to two contributions which will be used as part payment of the Nominees fees.

(If creditors reject the IVA proposals we do not seek to recover the balance of the Nominee’s fee from you). All fees will be discussed in detail with you prior to any plan being put in place.

Please note that any charges for progression of an IVA are approved up front with yourself and your creditors. Missed payments can bring your IVA to an end which may result in bankruptcy. Should your IVA fail, you’ll remain liable for the balance of your debt and any fees incurred by The Insolvency Practitioner and your home may also be at risk.